Q3 2024 Howmet Aerospace Inc Earnings Call Transcript
Key Points
- Howmet Aerospace Inc (HWM) reported a strong third quarter with a year-over-year revenue growth of 11%, driven by a 17% increase in commercial aerospace.
- The company achieved a record EBITDA of $487 million with a margin of 26.5%, and operating income increased by 33% year-over-year.
- Earnings per share rose by 54% year-over-year to $0.71, and free cash flow was strong at $162 million.
- The company improved its financial leverage, with a net debt-to-EBITDA ratio at a record low of 1.6 times, and received a two-notch rating upgrade from Moody's.
- Howmet Aerospace Inc (HWM) continues to see strong demand in its Engine Products segment, with revenue up 18% year-over-year, and expects continued growth in commercial aerospace and defense markets.
- Wheels revenue declined significantly, with a decrease of 18% in Europe and 10% in North America, due to weaker market conditions.
- The company faced a shortfall in revenue from its wheels business, which was approximately $30 million below the previous quarter.
- Supply chain constraints, particularly affecting Boeing and Airbus, pose challenges to future production rates and revenue growth.
- The commercial transportation market weakened, with revenue down 12%, led by a slowdown in Europe and North America.
- Despite strong performance, the company remains cautious about future margin improvements due to potential increases in labor costs and the need for additional hiring.
Good day, and welcome to the Howmet Aerospace third quarter 2024 Earnings Conference Call. (Operator Instructions) Also, please be aware that today's call is being recorded.
I would now like to turn the call over to Paul Luther, Vice President of Investor Relations and FP&A. Please go ahead.
Thank you, Joe. Good morning, and welcome to the Howmet Aerospace third quarter 2024 Results Conference Call. I'm joined by John Plant, Executive Chairman and Chief Executive Officer; and Ken Giacobbe, Executive Vice President and Chief Financial Officer.
After comments by John and Ken, we will have a question-and-answer session. I would like to remind you that today's discussion will contain forward-looking statements relating to future events and expectations. You can find factors that could cause the company's actual results to differ materially from these projections listed in today's presentation and earnings press release and in our most recent SEC filings.
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